Those are two good questions.
I thank you all for allowing me to be here today. I am enjoying the questions, because I think they're very germane to the problems in the industry.
With respect to processing capacity, the issue isn't with the processing capacity, because when the capacity was larger, no one was making money. That's why Polar Seafoods collapsed and ultimately became OCI. The individual parties couldn't make money. When they consolidated and had all those factories in place, they couldn't make money. So when they collapse it down to a single factory, and it can't make money, there has to be some thought there.
The issue is not shortage of capacity; it's a shortage of imagination in the products that are produced. Our high-pressured lobster meat product is a revelation to the industry. It produces a processed product that eats as well as live lobster. If I served the two of them to you out of the shell, you wouldn't be able to tell the difference. In 80% of the cases, the people we've served it to have preferred the high-pressured product to the live product.
The industry lacks the imagination or the ability to invest in new products. Your issue with the processing industry is that popsicle packs don't sell. They don't sell because they're garbage. I don't know if you've ever had the pleasure of eating one, but go and buy one, thaw it out, reconstitute it in the form you want to eat it, and taste it. Or, take a can of lobster meat and thaw it out, then buy a live lobster and cook it, and compare the taste and texture of the two. It doesn't deliver on the promise to the customer. The customer is looking for a wow experience, a truly exceptional eating experience. It's marketing 101.
The ability to store the product is not going to solve their problems. If you store the product, it costs money. You need electricity and you need labour. You're going to have some mortality in the process, unless you get very sophisticated, like we do. Our mortality is less than 1%; it's 0.62% this year, relative to an industry that is throwing away 10% to 15%. Storing is only going to exacerbate their costing problem with the product.
They have to tie the catch to their processing, and they have to upgrade the products they're delivering to the market. The market is saying it doesn't want to buy that; it's not good enough any more. It's the same problem that GM and Chrysler are having. “We don't want to buy that. There are better products around to spend money on.”
As the market gets tighter and the economy tightens up, the restaurateurs and retailers are saying, “We have to make damn sure that every one of our customers is happy with the experience. We can no longer fritter away customers with second-grade products.”
In these environments, we become more preferred by our higher-end customer base because they want delivery of a consistently great experience for their customers, every time. Once you disappoint a customer, you lose that customer.
Sustainability will help change some of the practices in the industry. Sustainability will maybe get the government to focus on the fact that we're killing the resource. We're killing the goose that's laying the golden egg, because of political expediency, because of the need to get re-elected in this four-year timeframe, as opposed to doing what's good for the resource over the long term.
It takes a lobster at least nine years to grow to the point of reproductive capacity. If we keep banging away at it, at some point, nine years in the future, we're going to find we don't have an underlying base of animals reproducing out there.